The wheels are falling off China's attempt to buy itself a chip industry with the announcement that it has abandoned its attempt to buy a 15% stake in Western Digital for $3.8 billion.

Tsinghua pulled out of the deal after the US government said it would investigate the proposal.

Western Digital is in the process of buying SanDisk, Toshiba's flash memory partner.

It is the latest set-back in a series of frustrated attempts by Tsinghua to buy itself into the semiconductor industry.

Approaches to Micron and Hynix have gone nowhere and Tsinghua’s $2.6 billion offer for stakes plus a board seat in three Taiwanese assembly/test companies Powertech Technology, ChipMOS Technologies and Siliconware Precision Industries (SPIL), are running into trouble as the newly elected Taiwan government – less friendly to China than the previous government – promises unprecedented levels of scrutiny for the deals.

Meanwhile the gap between the semiconductors which China makes and the semiconductors China buys is widening, says a report from The Information Network.

China produced 113.2 billion ICs in 2015, up from 102.0 billion in 2014, a year-on-year increase of 11.0%.

China imported 305.5 billion ICs in 2015, up from 285.7 billion pieces in 2014, an increase of 6.9% year on year.

That means the ratio of consumption to production increased to 27.0% in 2015 from 26.3% in 2014 and will increase to 28.9% in 2018..